Hardline Islamists controls swathes of territory in Somalia
A Somali Islamist group with links to al-Qaeda has captured another town, the latest in a string of gains by the movement known as al-Shabab.
The rebels - who are opposed to UN-sponsored reconciliation efforts in Somalia - overpowered pro-government forces in Hudur early on Wednesday.
Four civilians in Mogadishu were killed bringing the death toll to about 50 and 120 injured from two days of fighting.
It comes days after the new president returned to the Somali capital.
Correspondents say it is the fiercest fighting since President Sheikh Sharif Sheikh Ahmed, a moderate Islamist, was elected by MPs in January under a UN-brokered peace deal.
The first bunch of nearly 100 lawmakers and ministers arrived in Mogadishu from Djibouti on Wednesday to help the president in his efforts to set up a new unity government.
The failed Horn of Africa state has not had a functioning national government since 1991.
BBC Africa analyst Martin Plaut says the spreading influence of Islamic fundamentalists allied to al-Qaeda will be viewed with considerable alarm by Somalia's neighbours - Kenya and Ethiopia - as well as by the United States.
The BBC's Mohammed Olad Hassan in Mogadishu says another 11 people died as al-Shabab fighters seized Hudur, 300km (180 miles) north-west of Mogadishu on Wednesday morning.
Most government officials fled to Hudur after Somalia's temporary seat of government, Baidoa, fell to al-Shabab last month.
In the last six months al-Shabab has captured swathes of southern and central Somalia, including the ports of Kismayo and Merca and the towns of Buloburte and Elbur.
But the movement was also forced out of the towns of Guriel and Dusamareb in the last month after clashes with rival militias and former warlords.
Back in Mogadishu, thousands of residents have been fleeing a second day of fighting in the south of the city near the presidential palace, as rebels took on African Union and pro-government troops.
Among at least four civilians killed was a child who died when a shell hit a school.
Mo'alim Mohamed Aden Yusuf, a teacher, told AP news agency by telephone: "The shell landed on the school as the students were busy studying. Blood was everywhere."
At the weekend, al-Shabab claimed a suicide attack which left 11 Burundian peacekeepers dead at a Mogadishu barracks.
Civilians as usual are bearing the brunt of the bloodshed
Al-Shabab counts foreigners in its ranks and deputy al-Qaeda leader Ayman al-Zawahiri regularly issues statements in the group's support.
The movement is loosely allied with another recently formed grouping - the Islamic Party - whose forces now control parts of Mogadishu.
The fragile transitional government has been left with little more than sections of the capital under its control.
Ethiopian troops, which had been in the country since 2006 to support that government, pulled out at the end of January.
Some three million people - half the population - need food aid after years of fighting.